Exam 18: Financial Modelling and Pro Forma Analysis

A firm has $80 million in equity and $40 million of debt,it pays dividends of 20% of net income,and has a net income of $10 million.What is the firm's sustainable growth rate?

A firm has interest expense of $3500 each year for ten years.If the tax rate is 35% and the discount rate is 8%,compute the value of the interest rate tax shield.

What is common starting point for forecasting?

The market size for Loppins is 40 million units.If SPI Inc.has a market share of 40% and the average sales price is $3 per Loppin,what is the dollar amount of sales of SPI?

One of the shortcomings of the percent of sales method is that it does not account for the fact that capacity changes are lumpy and not incremental.

Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation equity value of Ideko in 2015 is closest to:

Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation EV/Sales ratio of Ideko in 2015 is closest to:

What is the free cash flow to equity holders for a firm with free cash flow of $7000,after-tax interest expense of $1000,and an increase in debt of $3000?

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2014-2019 -With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2016 is closest to:

The percent of sales method relies on the fact that capacity increases are ________,even though in practice such increases are ________.

Use this information for the following questions: XYZ Corp has the following financial information: Net income = $1 million Debt = $5 million Cost of debt = 4% Depreciation = $50,000 Capital Expenditures = $100,000 Increase in NWC = $10,000 -XYZ has excess cash of $400,000 and earns 2.5% on excess cash.If XYZ has a corporate tax rate of 30%,what is the free cash flow to the firm?

The market size for Loppins is 80 million units.If SPI Inc.has a market share of 30% and the average sales price is $2 per Loppin,what is the dollar amount of sales of SPI?

What is the free cash flow to equity holders for a firm with free cash flow of $9000,after-tax interest expense of $3000,and an increase in debt of $1000?

Which of the following accounts may reasonably be expected to grow with sales? I.Accounts Receivable II.Accounts Payable III.Property,Plant and Equipment IV.Inventory V.Long-Term Debt

What are a firm's options when it generates more cash than planned?

Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation unlevered price-earnings ratio of Ideko in 2015 is closest to:

Based upon the average EV/Sales ratio of the comparable firms,Ideko's target economic value is closest to:

Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation enterprise value of Ideko in 2015 is closest to:

________ is the maximum growth rate a firm can achieve without resorting to external financing.

Compute the value of a firm with free cash flows of $1000,$2500,and $3000 over the next three years,a terminal firm value of $40,000 after three years,and the unlevered cost of capital is 15%.Assume that the interest rate tax shield is zero.